Crop insurance has been an essential risk management tool for farmers during years of drought in Iowa. In 2021, around 22 million acres were covered by crop insurance in the state, and farmers spent $14.9 billion to purchase it. They paid $460 million, and insurance companies paid over $113 million in claims, according to the National Crop Insurance Services.
Iowa Secretary of Agriculture, Mike Naig, explained that crop insurance allows farmers to manage risks and deal with unpredictable factors outside of their control. He added that although some things on the farm can be managed, insurance can help farmers with things that are beyond their control.
Some farmers believes crop insurance is particularly crucial for younger farmers who are starting out, Over the course of a 50-year span on a farm, a farmer might return on $0.50 for every dollar of premium paid but younger farmers can benefit significantly from insurance coverage because if something happens in the first few years, it can literally wipe that business out.
Farmers have the ability to pick their coverage level and adjust rates accordingly. According to Naig, farmers need to sit down with their insurance agents to study and justify premium costs per acre. Overall, crop insurance has been a valuable tool for farmers in Iowa to mitigate risks and secure their livelihoods.
Photo Credit: GettyImages-zhuda
Categories: Iowa, Crops